After hitting a two year low in January, the median price for single-family re-sale homes rose 18.6% in March from February. Year-over-year, the median price was off for the seventh month in a row, falling 3.1%.

After falling to their lowest level since January 2009 in February, home sales bounced back last month, which is normal for this time of year, and rose 75% from February. The 203 home sales last month were 7.7% lower than last March.

So sales of homes in San Francisco are well, moving like hotcakes. Multiple offers seem to be the new norm for any property that’s cute and priced right.

This week, Zephyr real estate reported 29 sales in the company (these are sales that just went into contract, but haven’t closed yet) and 13 of those had multiple offers and 14 went over the asking price. There’s still old inventory being eaten up (I just got an accepted offer on a place that’s been on the market 100+ days) but the new, cute, well-priced listings are MOVING!

Out of the last 5 offers I’ve written for clients, 4 properties received multiple offers.

But what’s MORE interesting, at least in my opinion, is that we seem to be seeing a major resurgence of the all cash offer!

Yup. In the last few weeks, the words “all cash offer” are a phrase I’m hearing on a daily basis. Lenders are talking about it. Escrow officers are talking about it. And without a doubt, real estate agents are talking about it. I recently put in an offer on a property with clients that had a cash offer. We came in 12th out of 13 offers, and our offer was accepted. And then just yesterday, I helped clients (they did have a loan) get another offer acepted. 12 offers were received by the listing agent and THREE of them were all cash. In January, I had clients beat out on an 8 offer situation where the highest bidder was an all cash offer.

But what does this all MEAN?

Someone asked me the other day, “Why the hell would enyone ever tie up so much money in San Francisco real estate?” Well, I’m going to go out on a limb here, but it might mean that the folks that are smart enough (or lucky enough) to amass a giant pile of cold hard cash seem to think that dumping all of their dough into real estate RIGHT NOW is a smart investment decision.

Prices don’t seem to be going any lower and with sales spiking upwards and prices creeping upwards, it might be safe to deduce that the bottom of the SF housing market has come and gone.

And here’s the thing, the theory that interest rates are low and THAT’S why it’s a good time to buy don’t apply to the cash buyer. Interest rates don’t affect them.

I’d love to hear from some of you cash buyers, or even agents with cash buyers whether my theories are sorta correct or completely far fetched. You can drop a note in the comments, or if you want to keep yourself anonymous, email me.

(Editor’s Note: Set forth below are Unit Sales/DOM/Monthly Supply charts for the month of February for single-family homes, condominiums and 2-4 units, as well as Supply/Demand, Sales Rate and Median Price charts for the same month.)

NUMBER OF UNITS is the equivalent of number of sales/transactions. For condominiums, each unit is treated as a sale. For 2- t 4-unit buildings, the “building” is treated as a sale.

NUMBER SOLD is the number of properties in the market segment that closed escrow during the month.

NUMBER FOR SALE is the number of active properties on the market for one day or more during the month.

MEDIAN PRICE (SOLD) reflects the “middle” price point of a group of properties that have successfully closed escrow on a monthly basis, i.e. half sold for more and half sold for less than the median price. Tracking the movement of median prices over time provides a good indicator of the direction market forces are moving.

If the percentage change is positive between the two periods then there is upward pressure on prices in that market segment. If the percentage change is negative between the two periods then there is downward pressure on prices in that market segment.

AVERAGE DAYS ON MARKET (DOM) reflects how long it has been taking (on average) to draw an offer on a reasonably priced property exposed to the market. The AVERAGE DAYS ON MARKET is defined as: The average number of days it took all of the properties that went under contract during the period to accept a first position offer.

MONTH’S SUPPLY OF INVENTORY (MSI) is a measure of how long it would take, in months, to sell the existing inventory at the current sales rate for the specific neighborhood and property type. The MONTH’S SUPPLY OF INVENTORY is defined as: The number of active properties on the market for one day or more during the month, less the number of properties that have been withdrawn or expired, divided by the number of properties that have gone under contract during the month.

According to a CNN Money article, “After four straight years of declines, sales of million-dollar homes and condos rose last year in all 20 major metro areas, according to DataQuick Information Systems. On average, these cities saw an 18.6% jump in high-end home sales.”

The article goes on to state that “”It hasn’t been a good six months for all people, but it was a good six months for rich people,” said Glenn Kelman, CEO of Seattle-based real estate brokerage Redfin. “When Wall Street goes up, rich people buy homes.””

And Wall Street has been going up! Not to mention, the higher end of the job market seems to be on the rebound. A friend that works for a tech recruiting company has mentioned that she’s busier than ever looking for job candidates in the well over six-figure incomes.

So IS luxury real estate in SF on the rebound?

In San Francisco, in 2010 there were 1,083 homes sold over the $1M price range.

So far, in the first 66 days of 2011, 111homes over the $1M price range have sold and another 146 are already in contract, meaning that so far, 257 luxury homes have sold in San Francisco. At that rate, 1421 homes over the $1M will sell in 2011. That’s a projected 31% increase in high end real estate sales in San Francisco.

OK, so the numbers are rough, they’re based on a period of increased activity that we have experienced since the beginning of this year, and they don’t take into account the fact that I have no crystal ball to tell you what the future holds. But … there’s no denying that the outlook for 2011 is fairing better than years past, and if I had to place bets on how the luxury market will fair in SF, I’d say we’ll have a pretty good year ahead.

Today’s news from the mortgage world sucks, especially for San Francisco Real Estate.

From the SF Realtor’s Association:

Higher Fees, Lower Loan Limits = More Expensive Mortgages

Fannie Mae and Freddie Mac are raising the risk-based fees they charge on mortgages.

Beginning today, lenders will be required to pay the new fees on loans they sell to Freddie Mac, and starting on April 1 they will be required to pay the new fees on loans they sell to Fannie Mae.

Currently, the fees range from 0.25 to 3 percent of the loan amount. It is expected that the new fee will be one-quarter or one-half a percentage point higher.

In addition, the maximum loan that can be insured by Fannie Mae, Freddie Mac or FHA in high-cost areas will drop on October 1 from $729,750 to $625,500.

According to the California Association of REALTORS®, the likelihood of the maximum loan limit staying the same, given the composition of the House, is virtually nonexistent.

So, in coming months, expect more expensive mortgages.

So what does this mean to you if you’re looking to buy a home in San Francisco soon? To put it nicely, get off of your butt and do it.

Now, if you’re not in the market for a piece of SF real estate, you can stop reading now. This isn’t a sales pitch to convince you to buy when the time isn’t right for you. If you’re not in the financial position to buy, or if you’re in an unstable situation where you might be moving out of the City in less than 5 years, or if you’re living in a rent controlled 5 bedroom apartment paying $500 a month rent, then stay put, do not pass go, do not get a mortgage.

But, if you’re looking for a home in SF – there’s a good chance that even if prices stay the same, loans will cost you a bit more in April, and quite a bit more if you wait until October since the rates for jumbo loans are higher and with many SF homes falling WELL above the point where a $625,500 loan limit will suffice unless you got a giant chunk of cash to put down, you’ll be paying way more for the same price. (Unless you are looking for a home that allows you to get in under the $625,500 loan limit, then you won’t be affected nearly as much, though buying before April might not be a bad idea.)

So….. long story short, if you’re on the fence about buying an SF home, you need to decide which side of that fence you want to land on, and you need to decide FAST!

And sellers? Yeah, you might want to list that home pretty quickly too while buyers can still afford to buy it.

And of course, if you need a San Francisco Realtor to help you climb that fence to see which side will be greener for you, or to help you list your property for sale, give me a shout – giving overly blunt advise in the most tactful way possible is my specialty. 😉

Based on the pic above, you might think San Francisco has just gotten slimed. (Yes, this is a bad reference to the 80’s, the Ghostbusters and even Nickelodeon’s Double Dare – yes, I’m probably dating myself, but if you knew what I was talking about, you really have no room to judge. ;-))

What you’re really looking at is a heat map that focuses on areas that are the most transit friendly.

Lucky for us San Franciscan’s, our transit situation is pretty bright, even WITH all of the drama that our lovely MUNI brings us on a daily basis – from crashes to late running buses to financial woes (visit the N-Judah Chronicles to get a good scoop on all things MUNI), we’re still probably one of the luckier cities in the nation. (I mean, I’ve been in places that have NO public transportation on weekends at all!)

In one study, it was found that a good WalkScore added significant value to a property:

More than just a pleasant amenity, the walkability of cities translates directly into increases in home values. Homes located in more walkable neighborhoods—those with a mix of common daily shopping and social destinations within a short distance—command a price premium over otherwise similar homes in less walkable areas. Houses with the above-average levels of walkability command a premium of about $4,000 to $34,000 over houses with just average levels of walkability in the typical metropolitan
areas studied.

And being that a good WalkScore adds value, I can only surmise that a good TransitScore adds value as well. (In case it needs explanation, a good Transit Score judges how easily accessible public transportation is from a specific address.)

Transit Score provides a 0 -100 rating for more than 100 cities where public transit data is available. Ratings range from “Rider’s Paradise” that offer world-class bus and rail service, to areas with limited or no nearby public transportation.

How do they do it? A Transit Score is calculated by assigning a “usefulness” value to nearby transit routes based on the frequency, type of route (rail, bus, etc.), and distance to the nearest stop on the route. The “usefulness” of all nearby routes is summed and then it is normalized to a score between 0 – 100.

Now, while a good Walk Score has already proven to add value to a property, based on the frequency of buyer requests for locations near easy public transportation, I’d be willing to put my money on the fact that there’s a correlation between a good Transit Score and an increase in property value.

And of course, if you’re looking to buy or sell a walkable, transitable, or for that matter, any home in San Francisco, give me a shout – we’ll see if we work well together to achieve your SF real estate goals. 😉

If you were signed up for Zephyr Real Estate’s Market Tracker, you’d already have an awesome newsletter in your email inbox waiting for you to open it right now.

The newsletter would have the latest San Francisco home sales (sortable by neighborhood or property type), the latest SF property listings (also sortable by neighborhood and property type), and some interesting tidbits about the City too.

In light of the recent earthquake in New Zealand and the fact that in any given week, California land is shaking dozens of times, I thought this would be a good time to share these natural hazard maps with you again. Looking at the USGS Map, just in the last day, the Cloverdale area, about an hour and a half north of San Francisco, has had dozens on little shakers.

And in case you don’t already know – San Francisco is kinda known as prime earthquake country. But where you live has an impact on how an earthquake might affect you (and how much shaking your home will do.)

So I thought I’d throw a few maps up here for readers that are curious about the location of natural hazards in San Francisco.

Click on the map for a bigger view, and to be taken to the source of the map.

San Francisco Liquefaction Map

San Francisco Natural Hazards Map

My personal favorite, which is sort of a hazard because building a house on water is never a good idea, is a map of all of the creeks, marshes and landfill throughout historical San Francisco. This map is from the 1890’s. As with the others, click to see the map full size, and to see the source.

San Francisco Historical Creek Map

And finally – if you’re curious about the last little rumble you felt – check out this map which will show you the size and magnitude of the most recent earthquake.

If you’ve been working with a good and honest mortgage broker, you’re already getting the lowest rates possible. A good mortgage broker knows that providing folks with lowest rates and best terms is the right way to do business, regardless of the amount of his paycheck.

A good broker knows that they are only as good as their reputations, and unless they’re honest and upfront with every client, they won’t get repeat business. (Which is THE way to do business – ANY kind of business, whether you’re in real estate or you’re a dentist,

But not every mortgage broker works that way, especially when you consider that if a loan has higher interest rates and higher points – the mortgage broker makes more money! Yikes!

The new rule will change things though – the way brokers will soon get paid will be a fixed commission that is no longer tied to loan terms. Yay!

The new rule comes from the Federal Reserve and is called “Loan Originator Compensation amendment to Regulation Z” and the rule kicks in April 1st of this year (2011).

So if you’ve been dealing with a broker that’s been putting their paycheck in front of your needs, your loans, be it for a purchase or a refinance, will get cheaper.

Though if you haven’t been dealing with some honest, (shameless plug for my favorite mortgage broker alert!) like Tim Higbee from Guarantee Mortgage, then, well, you probably won’t notice much of a difference. Honest brokers like Tim have been putting their clients’ needs first for years. 🙂

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About the Blog

Luba’s San Francisco Real Estate Blog was created to share insights about San Francisco Real Estate and about San Francisco living. Written by Luba Muzichenko, an "almost-native" San Franciscan and a local Realtor® with Zephyr Real Estate, Luba’s San Francisco Real Estate Blog is meant to inform you about a variety of good things and happenings around SF and its unique neighborhoods, about buying and selling homes in the City and about the real estate market in general. If you like what you see, please tell a friend.